A two-day video summit of European Union heads of state and government starting today will have to grapple with an uptick of the COVID-19 pandemic in some countries, as the continent’s economic woes could worsen with the persistent problems of the bloc’s vaccination campaigns.
- New infections are on the rise in France, Hungary and the Czech Republic, even if they are in gradual decline elsewhere on the continent.
- Only about 6% of the EU population has so far received a first dose of one of the vaccines, in contrast with the U.K. (28%) and the U.S. (20%).
- A survey from the European Central Bank showed on Thursday that banks in the eurozone had tightened credit conditions last month on worries about the financial state of some of their clients.
- The ECB chief economist said in a speech on Thursday that the preservation of “favorable financing conditions” in the eurozone was the major reason why “ample monetary stimulus remains essential” in the coming months.
Read: As virus variants keep spreading, EU governments consider stringent new travel bans
The outlook: Calls for EU leaders to agree on a new round of massive fiscal stimulus, on the model of the U.S., are likely to remain ignored this week.
That will reinforce the solitude of the central bank as the main architect of the economic response to the pandemic. It will make all the more interesting the presence of Mario Draghi, the former ECB president who became Italy’s prime minister two weeks ago and who will take part in the summit as government leader for the first time.
In the short term, the risk is that the EU’s poor performance in organizing proper vaccination campaigns will increase divisions on steps to be taken jointly to cushion the blow of the second wave.
EU leaders are expected to discuss the opportunity of adopting a common standard for vaccination certificates or “passports” that would facilitate the resumption of travel and tourism in the region. But given their wide views on the matter, they are unlikely to agree on it this week.
From the archives (March 2020): How Mario Draghi’s ‘Whatever it takes’ became Europe’s antivirus mantra